Trudeau government spending is putting entitlements for the elderly at risk? – January 9, 2020
Maybe we can borrow and spend and inflate or currency forever, I’m not sure, it’s worked for about 20 years now, entire generations of Canadians only know an economic environment of easy borrowing. It’s hard for most Canadians to even imagine an economic environment where bankers only lend you money if they feel you have the ability not to service it, but to pay it back in full if they call in the debt. It’s hard for most Canadian to imagine owning a home and one day being told that although they’ve been paying their bills on time, no, bank wants to lend them money at a favorable interest rate, with monthly payments that they find affordable.
Economic crashes typically happen when a currency either has to inflate too much or deflate. A deflation period has the effect of drying up the credit markets, this is, of course, the fear of all central bankers. Deflation in an era of entitlements is an economic disaster because although people believe that it’s only consumers who are indebted, the reality is that a large segment of the business population, which often operates in unregulated financial markets is the main cause for concerns because in the event employers who are in debt, can’t meet payroll or if a real estate investor all of a sudden can’t borrow enough money to service his mortgages, well, this my friend equates to an economic collapse.
Now, the traditional news outlets, who understand the disaster Trudeau’s government is causing aren’t going to frame their arguments in the way I am, because, it may come across as fear-mongering, however, if you read the article below, you can clearly see that Trudeau’s expansion of not only the public sector but Public sector debt at some point is going to present some challenges that with all of the regulations his government have added to the country may create extended periods of discomfort for Canadians on fixed incomes who MIGHT see their quality of life lessened as more money goes to servicing debts and paying salaries of Public Servants.
Adjusted for 2019 dollars, the Liberals are even outspending Canadian governments that had to contend with world wars and global recessions.
Federal spending hits record high as demographic time bomb set to explode | NationalPost.com
The problem Canada faces if there’s some sort of Global correction is that the numbers won’t make any sense in Canadian dollars. There are a lot of PROTECTED Canadian industries that already distort the pricing mechanisms in Canada, Canada by no stretch f the imagination is a poor country, however, it’s important to remember the damaging effects Eastern Canada has had on the Canadian economy as a whole. Equalization payments often cover up the economic shortfalls in Eastern Canada and Trudeau’s government, as well as other Leftist politicians, have been focused on things like Climate change which are harming the Western Canadian provinces from being net producers for the Canadian economy.
Now, if an economic downturn occurs, it’s not a certainty that the leader will know how to fix the problem, the leader may, in fact, make the problem worse and don’t think that Conservative leadership can solve the problems Trudeau is creating, as proven by Former Prime Minister of Canada Brian Mulroney, Conservative leadership can actually make the problem even worse.
If the Political leader is unable to pinpoint the economic problems the country is facing, there could be an extended period of stagflation and this would be harmful to entitlements in an era in which many Canadians are a missed paycheck away from bankruptcy. The Cashflow of the Canadian economy is out of whack and thankfully, America hasn’t suffered an economic downturn recently. Now, as I’ve stated in the beginning of this post, who knows maybe this debt experiment will work, but history has shown us otherwise and what makes me nervous is that Canada embodies a society which believes strongly in big government and entitlements, so it’s unlikely that Libertarian type of Candidate will be a dominant force in Canadian politics any time soon.
Maxime Bernier, doesn’t seem to have the right messaging that resonates with Canadians and I’m not too sure what to make of the Western Separatists political party. The Bloc Quebecois will thrive under a Canadian economy going through an economic downturn and this bothers me the most because chances are, whomever the Conservatives pin against Trudeau, will have to have a message that caters to Quebec interests, however if you see the debt disaster heading Canada’s way, if there’s a crash or correction, only the loosening of particular regulations will help to generate the money needed to service Welfare and Entitlements many Canadians need in order to survive. We shall see what will happen in the future.
Interesting times ahead!